www.oilinuganda.org OILIN UGANDA www.oilinuganda.org August 2012, Issue 2 OILIN UGANDA Everyone’s talking about oil. We capture the whole conversation.

Ntoroko well No end to land wrangles disappoints | By Oil in Uganda Staff Land disputes in the oil-rich regions are often Chinese complex, but two things seem clear: oil discovery has encouraged opportunists, and many ordinary people are cursing.

The first exploration well drilled in Uganda by the Chinese National Offshore Oil Corporation (CNOOC) A year ago, President Museveni tried to failed to find oil, and it appears - quell growing tensions in the oil-rich- that the ‘Kanywataba prospect’ Bunyoro region by banning further - will now be relinquished for pos land deals while a committee investi- sible future re-licensing by the gated the matter. No official commit Ministry of Energy and Mineral tee has yet reported—but investiga

Development. tions by Oil in Uganda show ample Wandera Stephen by Photo evidence of continuing strife. The news was broken not by - CNOOC but in a July operational In Kasenyi, Buliisa District, villagers update from the Chinese compa complained that one Franco Kahwa, ny’s partner in Uganda, Tullow Oil. a local entrepreneur widely named According to the update: in speculative land deals, has bought community land from two men who “The Kanywataba exploration - had no right to sell it. Villagers who well (operated by CNOOC), in the protested the deal say they were at southern part of the Lake Albert - tacked by thugs and police. Rift Basin, commenced in May Eriakimi Kaseegu, LC 1 Chairman of Kasenyi, in Buliisa District, says he was beaten and arrested 2012 and results of drilling, wire- In Kigorobya, Hoima District, locals in May after contesting the unlawful sale of community land, including the site of Tullow Oil’s line logging and sampling show reported that a senior Internal Security Kasemene-3 well. that the reservoir is water bear - Organisation officer, Major Herbert ing. This wildcat well was drilled Asiimwe Muramagi, has acquired - 20km from the nearest well con 1,205 hectares of land from a Credit - trol. This was the last exploration and Savings Society whose original and in later developments. Longstand oil and gas logistical support company ing ‘squatter’ occupants of the land that was originally contracted by Heri well in the southern part of the ownership of the leasehold is bitterly- - basin with this exploration licence contested. Major Muramagi denied complain of intimidation and violence tage Oil and Gas, and whose services expiring in August.” buying rights to the land and sup from armed police and soldiers. have been retained by the China Na plied documents naming one Christine tional Offshore Oil Corporation. The Kanywataba area is part of the Further south, in Ntoroko District, a Mirembe as the buyer. Yet testimonies Semliki....Continued basin which on was Page explored 2 family accused local leaders of leasing Pages 3 and 4 carry more detailed from local people, including a parish to outside investors land that the Toro reports on these cases, while pages priest and even the Credit and Savings Kingdom gave their forefathers 60 Uganda.6 and 7 present a broader analysis of Inside this issue Society seller, all suggest that the Major years ago. Some of the disputed land the linkages between land and oil in was prominent both in making the deal was leased to Mineral Service Ltd, an 3 | The great land rush Alpha Oil fails to turn a profit | By Nick Young Three private entrepreneurs stood to make a 5 | Portraits from fortune by giving a small British oil explorer access refinery site to Uganda’s Albertine Rift. 6 | Oil, land and - dispossession - - In 2007, a little-known Uganda compa banker and Managing Director of the and a considerable portion of adjacent 8| Oil waste ny, Alpha Oil Ltd., obtained an explora Kisita Gold Mine in Mubende, and - land in Rukungiri and Kanungu dis tion licence over a large chunk of the - Hennie Mulder, a South African citizen tricts. dumped on Albertine Graben and stood to gain who, Mr. Kaijuka says, was a gold-min multi-million dollar profits from a pas ing associate of Mr. Mawanda’s. Asked why the Ministry of Energy, farmers land by then headed by Daudi Migereko, sive partnership with an international- These three co-directors each put in 33 should concede a licence over such a explorer—but those hopes evaporated- - 10| Cultural leaders early this year when the chosen part million Ugandan shillings (USD 18,500 large area to a company with minimal- at 2005 exchange rates) as start-up registered capital and no oil explora demand a share ner was swallowed by a bigger com pany that has abandoned the area. capital for Alpha. tion experience or expertise, Mr. Kai Oil in Uganda juka replied that it was because Alpha 11| What is Dutch Alpha was established at the end of In an exclusive interview Mr. Kaijuka - “had the capacity to attract” qualified 2005 by three entrepreneurs: Richard told that the Government international investors. disease? Kaijuka, a former Minister of Energy of Uganda gave the company an explo- ration licence for “the whole of Block “We were required to get technically and Mineral Development who later ....Continued on Page 2 held a senior position at the World 4,” covering those parts of Lake Ed competent, financially sound, proven Bank; Abbas Mawanda, a well- known ward that lie within Ugandan territory We capture the whole conversation. 1 www.oilinuganda.org OILIN UGANDA

Ntoroko well disappoints Chinese Alpha Oil fails to turn a profit

....Continued from Page 1 ....Continued from Page 1

by Heritage in the early 2000s, with [international] partners for us to only moderate success. A large deposit proceed. Because we realised that we of methane was discovered, but it was needed deep pockets to get into this too contaminated with carbon dioxide business. On our own we couldn’t have to be commercially viable. - done anything.”

Tullow later bought Heritage’s pros - Mr. Kaijuka says he approached pecting rights in the Albertine Graben several large companies, including and earlier this year sold equal inter Petrobras of Brazil, but they were not ests in their Ugandan assets to TOTAL interested, so Alpha instead made a and CNOOC. The Chinese company is deal with UK-based Dominion Oil. now acting as ‘operator’ of the fields in the south of Lake Albert, but all three Alpha agreed “to hand over the block companies will have an equal stake in [to Dominion] so that they could any eventual profits. technically carry the job.” A Uganda- registered subsidiary, Dominion It is not clear whether the three Uganda Ltd., would bear all the costs area.partners will seek an extension to the of exploration and keep 95 percent exploration licence in the Kanywataba of any eventual profits, while Alpha - would take 5 percent. In effect, Alpha’s cut would be a reward for getting Do exploration in the East African blocks billion.the area contained 316 million barrels Ms. Chai Wei, a Corporate Affairs - minion access to Uganda’s oilfields. representative for CNOOC in Uganda, - where it held rights. of oil, and possibly as much as 1.14 regretted that she was unable to com Alpha’s directors agreed to this on Exit Ophir - Nevertheless, Dominion managed to ment on the apparently disappointing April 27, 2007, authorising Mr. Kai carry out aero-magnetic surveys of performance of the Ntoroko explora juka to make the deal with Dominion. Oil in Uganda, the Lake Edward area in 2008 and, in Like Ophir, Octant declined to talk to tion well, or to elaborate on CNOOC’s The government signed a Production 2010, to drill one well, Ngaji-1. This but it seems possible future operational plans. Sharing Agreement with Dominion found “valuable geological data” that that their fundraising campaign bore three months later, on July 27, 2007. “confirmed the presence of excellent little fruit. She explained to Oil in Uganda that Mr. Kaijuka served for several months CNOOC has only recently established quality reservoir sands,” the company as the first Chairman of Dominion For, in May, Ophir closed down the an office in Kampala, and that media said.Enter But Ophir it didn’t find oil. ‘Wildcatters’Uganda Ltd. Dominion offices in Kampala and enquiries still have to be “handled by apparently relinquished the licence, Beijing.” In February 2012, Ophir Energy leaving several unanswered questions Far from having “deep pockets,” The company will, however, continue bought Dominion for US$ 180 million behind. Had Dominion fulfilled all its Dominion was a ‘wildcatter’—a small to develop the Kingfisher fields, where in a “friendly take-over.” work plan obligations? Was there in company that raises venture capital to commercial quantities of oil and gas - fact some dispute over the licence-- explore ‘high-risk’ areas. If they find Like Tullow Oil, the UK-based Ophir is have already been found.fisher fields, which Dominion had applied to renew oil, such firms usually sell on the pro a rising star in East African oil and gas where commercial quantities of oil and - in April, 2011, but which had not duction rights, for very large profits, to exploration. Both companies started gas have already been found. been formally renewed by the time of bigger players. out in much the same league as Do the Ophir take-over? Was it this that minion, but grew fast as a result of big Yet by 2007 the Albertine Graben- prompted Ophir to cut their losses and Oil in Uganda discoveries. Ophir was boosted by gas pull out, preferring to concentrate on was no longer ‘high risk.’ Ten years Oil in finds off Tanzania’s coast. Tanzanian waters where they have is published by ActionAid of exploration by earlier wildcat Uganda International Uganda with funding ters—Heritage, Hardman and Energy Ophir would not to talk to bigger fish to fry? support from the Ford Foundation and - Oil in Uganda Africa—had resulted in discoveries Managingthe Democratic Editor: Governance Facility. but it seems that they mainly A Ministry of Energy spokesperson that proved the Graben’s oil potential.- wanted to acquire licences that Do was only able to tell minion held in offshore Tanzania, to StaffNicholas Writers: Young OBE This was thus a highly attractive op that he believed the exploration area- consolidate their own holdings in that portunity for Dominion—secured not would now “revert to government,” an highly lucrative field. Chris Musiime through a transparent, competitive that exploration rights may be be of ContributingFrederick Womakuyu Writer: fered again in future licencing rounds. process but through their relationship In March, Ophir signed a “Letter of - with the well-connected Alpha Oil. Intent” to give 80 percent of its rights Mr. Kaijuka was also unable to cast EditorialHalima Abdallah Support & Advisory Group: in the Ugandan block to a start-up Ca- Nevertheless, Mr. Kaijuka insists that light on recent events. He says he was nadian explorer, Octant Energy. Octant Editor, Fountain Publishers the arrangement with Dominion “was not consulted and had no advance Charles Odoobo Bichachi would have to pay all further explora absolutely normal because they filled knowledge either of the Dominion - Chair, Civil Society Coalition on Oil and Gas tion costs and, if they found oil, Ophir HenryDirector, Bazira Water Governance Institute allDominion’s the requirements.” woes takeover or of the Ophir withdrawal, would take 20 percent of any profits. only learning of these from the news Ecological Christian Organisation As with Alpha’s earlier arrangement, papers. “I don’t even know when they Lynn Turyatemba Registered in the Virgin Islands, a tax this would be a way to retain a share pulled out. I don’t know the end of the Executive Editor, African Centre for Media in possible profits without bearing any Dr.Excellence Peter Mwesige haven, Dominion listed in 2006 on the story, I myself am trying to find out.” London AIM (Alternative Investment financial risk. Governance Coordinator, ActionAid Interna- Market) exchange—which allows He is left ruing the fact that “Alpha Sophietional Uganda Kyagulanyi Yet Octant had no money. Listed share trading with few regulations didn’t make even one dollar out of on Canada’s online TSX exchange, this.” Senior Researcher, Economic Policy Research and low capital requirements. designed for new ventures seeking Dr.Centre, Lawrence Makerere Bategeka University The company had little ready cash to capital, it was a newborn wildcatter, Less well-connected Ugandans haven’t Policy Manager, ActionAid International invest. Worse, according to a report trying to raise US$ 65 million to invest made a dollar either, or even had PaulUganda Ojuman - in The Financial Times, one of the in exploration. the chance to, in all the wheelings Enquiries: [email protected] - world’s foremost business newspa and dealings and rent-seeking of an To attract that capital it commissioned industry that to most people remains pers, “legal disputes between execu an independent evaluation of the- Lake tive shareholders drained funds and as opaque as a lump of Uganda’s waxy Layout Design: Grand Brand Edward prospect by DeGolyer and crude. confidence in Dominion.” During MacNaughton, a consulting com More detailed coverage of this story can be the European credit crisis of the late pany. Their “best estimate” was that, found on our website, www.oilinuganda.org 2000s, the company struggled to raise combined with an area licenced to capital to service its debts and to fund Dominion in the DRC part of the Lake, 2 We capture the whole conversation. OILIN UGANDA www.oilinuganda.org The great land rush

| by Chris Musiime and Frederick Womakuyu The Bunyoro oil rush has been accompanied by a land rush, and the police and local authorities appear to side with investors who are acquiring leasehold and freehold titles by dubious means.

- Picture credit: Steven Wandera

KASENYI, BULIISA DISTRICT: Villag “The attackers seemed to know the ers here were beaten by hired thugs authorities were coming, because and detained by police this May just as they [the authorities] were after contesting the fraudulent sale about to reach, John ordered his men- of community land, including a plot- to hide their weapons. Rather than where Tullow Oil’s Kasemene-3 well rescue us, the police started beat is located, according to LC 1 Chair ing us too, arresting the ones they man, Eriakimi Kaseegu. thought were ring-leaders.”

“In 2010, one Kahwa Franco, a rich Kaseegu and two others were taken Mugungu who stays in Kampala, to Buliisa Police Station, and then bought land from two Congolese,” transferred to Masindi Police Station. Kaseegu told Oil in Uganda. “It was a horrible experience. I was “Local leaders had let them settle suffering from tuberculosis, but the some time back because the area was police who arrested us would not largely uninhabited, although useful even allow me to drink water or for grazing. But these Congolese did a make a short call along the way to This young Kasenyi resident faces an uncertain future deal with Kahwa, who then sold off a the police station. I almost urinated chunk of the land to Tullow Oil.” on myself,” says Kaseegu. - - In the living room of his small, grass- He says that he was detained for five said that Tullow is not “mandated” to A social worker who cares for or thatched house, Kaseegu passionate days after which he was taken to disclose who it leases land from. “We phans in the area told Oil in Uganda ly describes the events that followed. court in Masindi and released on bail. would recommend that you approach that land sales are on the rise as - The cases against him and one other the Buliisa District Land Board as the more and more local people seek to “We summoned the so-called sellers villager were later dropped, but a appropriate authority to prove land mint money from selling “idle” land.- to a village meeting, where they ad third man was still required to report ownership of land in the area,” she mitted selling the land. One of them, to court monthly. wrote in an email. “Initially it was only some few ty Benja Tepolo, said that he had sold coons like Kahwa who were buying the land where the oil well is situated Kaseegu adds that many people were Tundulu Sabiiti, Chairman of the land,” she said “But now the local for about one million shillings (US$ beaten by police but feared to report Buliisa District Land Board, said in people are involved and it has turned 400).” this because they believe that the a telephone interview that he could clans against each other. They grab- policeNew insecurity are agents of of Kahwa. tenure not comment on the case, adding each other’s land.” She added that The men agreed to refund the money only that “Those land arrangements some opportunistic people claim to Kahwa and try to repossess the led Oil in Uganda are between government and the ing to have been born in the area land, but it appears that this never After narrating his ordeal, Kaseegu company. You ask them.” When asked are now surfacing, saying that their happened. In 2011, workers arrived well. on a tour of the whether he had heard of Kahwa forefathers were buried there and so to fence off the area enclosing the oil area, much of which seemed to be Franco, he hung up. - they are entitled to land. uncultivated bush. About two acres have been cleared and fenced off People elsewhere in Buliisa fre The Paris-based regional publication, This April, Kaseegu was astonished around the Kasamene-3 well site.- quently mention Kahwa’s name in The Indian Ocean Newsletter, has to receive a letter from Buliisa Town however. - connection with dubious land deals, also linked Kahwa to land deals on Council informing him that they Asked how much more of the sur behalf of senior Ugandan politicians. were coming to inspect and demar Oil in Uganda rounding area was included in the Its“ The December, current Minister 2010 issue for Informareported:- cate Kahwa’s land. The letter, which sale, Kaseegu said he didn’t know. “All tion and former chairwoman of Kaseegu showed to , I know is that we have lost our land,” Documents compiled by the the National Resistance Movement instructed him as local Chairman to he replied. Buliisa District Land Board parliamentary group, Kabakumba inform the villagers and mobilise in 2010 show that Kahwa Maisko, is high on the list of . . . It was not possible to establish them for a meeting with the town Franco had by then applied landowners who hope to see their exactly how much land Kahwa and council officials. for freehold purchase of 13 land increase in value when the oil others have acquired. But the anxiety plots totalling 2,613.5 acres. exploration comes under way. She is “I wondered how they could refer to and anger of the local population was The great majority of these believed to have obtained the land the community’s land as Kahwa’s!” perfectly clear. - applications are marked through cooperation with another KaseeguViolence exclaims. and arrests ‘Provisionally approved.’ - Land tenure in the region is over landowner, a certain Khawa Franco, whelmingly customary. Local leaders- who supervised the transaction in col- On May 2, Town Council officials ar allocate families the rights to use lusion with Fred Lakumu, the head of rived for the meeting. But no sooner land, and those rights can be inher the Buliisa district council. Among the had it started than men armed with ited by new generations in a family; other landowners in this zone are the sticks, bows and arrows descended but the occupants do not have land Second Deputy Prime Minister Henry on the 80 or so villagers. titles and they are not entitled to sell Kajura as well as some DRC nationals the land. - who have obtained land deeds from “A group of about thirty men, a the Uganda Land Commission, like mixture of Congolese and Bagungu, With some members of the commu Raphael Soriano, a wealthy business- started beating up people. One John, nity now cutting deals with outside man from Katanga. The latter may a Mugungu from Wanseko, appeared investors, others have lost all sense be one of the financial backers of the to be commanding the group.” of security, and are preyed upon by Congolese rebel Gadi Ngabo, currently theThe fear Kahwa of eviction. trail living in exile in Uganda.” Shortly after the violence began, Kaseegu says, the Resident District Commissioner, Florence Beyunga, Tullow’s Corporate Communications arrived on the scene in the company Manager in Uganda, Cathy Odengo, of the District Police Commander and clarified that Tullow leases, rather several police officers. than buys, land where it operates, but We capture the whole conversation. 3 www.oilinuganda.org OILIN UGANDA

Senior ISO - and Credit Society, confirmed selling the Fathers in this parish, as spiritual return for vacating the land. Officer the lease, saying that Major Murama- leaders, to help him to mediate.” gi bought it from the Society for 500 In addition, the file included a Notice named in million shillings (US$ 200,000). Ac However, the priest added that - of Eviction, served on September cording to Birinaiwe, the Society was “many months have gone” since then 9, 2011 by the Kampala law firm land dispute formed in 1951 and had acquired the and Major Muramagi “has been dodg- Kateera & Kagumire “on behalf of our lease for a ranching scheme. ing here and there” without following client, Christine Mirembe,” against a - up his request for mediation. Mean seventh occupant, who had allegedly This account is bitterly contested by while, according to Fr. Sabiiti, the accepted a 5 million shilling compen one Erineo Rugondo, who insists that Major has been “putting up projects sation package but then refused to KIGOROBYA, HOIMA DISTRICT: A he is the bona fide leaseholder. [developments]” Oilon inthe Uganda land. vacate.Oil in Uganda senior official in Uganda’s Internal Security Organization (ISO), Major- He says that in 1965 the Bunyoro - Yet, shortly after spoke- phoned Kateera Herbert Asiimwe Muramagi, has Kingdom Land Office granted him a to Major Muramagi, Deo Birinaiwe & Kagumire to verify whether been named in a complex land dis renewable lease in the name of Kaba contacted us saying that the Ma they were acting on behalf of Ms. pute here, with some locals saying bwa Ranching Scheme—but that he jor had asked him to call. “It was a Mirembe. Managing Partner, Yusufu that last year he illegally acquired the allowed some 80 local families to mistake,” Birinaiwe said, referring - Kagumire, a renowned conveyancing lease on 1,205 hectares of land. - continue using parts of the land. to what he had previously reported lawyer and former Chief Registrar of about the land transaction. “He [Mu Titles, confirmed that Ms. Mirembe Villagers in Kisukuma Parish, Kig Rugondo claims that some years ramagi] did not buy the land, we did was his client but declined to discuss orobya sub-county, further allege ago, in “an outright fraud,” Birinaiwe not sell it to him. Christine Mirembe her business affairs or relationship to that when they resisted demands obtained a 49 year lease on the same- bought it.” - Major Muramagi. to vacate the land they were beaten land, from the District Land Board, in and arrested by armed police and the name of the Teachers Coopera Asked who Ms. Mirembe was, Birinai Finally, the Mulindambura dossier soldiers. tive—which, Rugondo claims, exists we described her as “a Kampala lady,”- contained documents relating to an in name only. adding that “I did not follow her alleged case of threatening violence “We protested by occupying the land Oil in Uganda much.” He said she had paid 300 mil and malicious damage. - and not allowing any activity to take- In 2007, as confirmed by documents lion shillings (not the 500 million he place,” said Aloysius Kyaligonza, the shown to , Rugondo had claimed in the earlier interview) A photocopied, handwritten let Local Council II Chairman of Kisu wrote petitioning the Commissioner and that the sale took place “last year ter, dated June 27 2011, from LC 1 kuma Parish. of Lands over the case, and in 2010- sometime, around April.” Chairman of Ndaragi II village, Tegras he wrote to the Land Committee - Kaahwa, reports to the Kigorobya In October 2011, according to Chairman in the Office of the Presi Asked why he had previously named Police Post a complaint from one Kyaligonza, a truck load of soldiers dent, claiming that the file recording Major Muramagi as the buyer, Biri resident. He, the letter says, had been assaulted and beat the protestors, his original lease (LWD 3200) had - naiwe said “He had got interested in threatened by a group of villagers some of whom were also arrested. - been “hidden for over ten years” by it, we had dealt with him for a long who “instructed him to take them to- “We suffered silently and no district Deo Birinaiwe, and that “There is an time, so his name was always the one the manager of the Bunyoro Teachers- officials came to our rescue,” Kya other file (No. LWD 5900) being used that came to mind. But when I finally Savings and Credit Cooperative Soci ligonza says. in the process of that land.” - checked the records, I found it was ety investments which are being per Oil in Edward Bende, a 41 year old army Christine Mirembe.” sued [sic] at their land.” They then, Meanwhile, he and the other occu Uganda - allegedly, “grabbed him towards the veteran, says that last September - pants of the land continued to use The following afternoon, construction site [and] destroyed the he and some 50 villagers took their it—until the sale to Major Muramagi, received a call from Mug complaint to the Hoima Deputy Resi construction materials at the site.” who, Rugondo says, has since been enyi Mulindambura, a Kigoroba - dent District Commissioner, Abdul intent on evicting them. sub-county councillor. He said Major This is accompanied by six colour Swammad Wantimba. Muramagi had asked him to explain photographs of damaged construc Rugondo’s daughter, Mercy Rugadya, the situation. A few days later the tion materials, and by a Uganda - “We told him our issue and he told lodged a complaint against the ISO us to report to police and open a councillor delivered to our office a Police “ammended [sic] charge” officer with the Uganda Human packet of documents that appear to sheet, dated October 10, 2011, nam case. He told us he would arrange a Rights Commission. The Commission meeting with the buyer and asked confirm Christine Mirembe as the - ing seven individuals as “threatening Secretary, Gordon Mwesigye, wrote legally registered owner of the lease violence.” - us to return in a week’s time. To our to Major Muramagi on February 12, surprise, as we were leaving, [four of to Plot 8, Bughaya Block 6 at Kyam 2012, requesting that he “desist from gando,Dossier Kigorobya. It is further accompanied by a photo us] were arrested by police, accused harassing the squatters on the land copy of a handwritten letter, signed of stealing 350 cows belonging to pending hearing of the matter by a on October 30, 2011 by eleven family Muramagi. We were remanded to courtDenials of competent and retractions jurisdiction.” The file of documents includes a members of a detained prisoner. Hoima Prison for over three months - - copy of a sale agreement, dated April by Oil in Uganda - and released on January 12 this year.”- “The family of Mzee [name withheld - 5 2011, between Bunyoro Teach ] with grate humble When contacted by telephone, how ers’ Cooperative Savings and Credit “I came home and was told to re ness would like to request you kindly ever, Major Muramagi—who is Mari Society and Christine Mirembe of P. sume tilling my land. I had to fill in to release their son [name withheld] time Director of the ISO, responsible O. Box 7026, Kampala, indicating that some forms, in fact all villagers were who was arrested and remanded at for security on Lake Albert —denied Ms. Mirembe bought the land rights required to fill in these forms”. Hoima prison under allegations of involvement. “It is all lies. I do not for 300 million shillings. Bende says he has lived in the area Oilown in any Uganda land. in Hoima and I have malicious damage, theft, violence and all his life. “My grandfather is buried never owned land in Hoima,” he told Photocopied land title certificates others which happened in your farm here. Personally I had thirty acres, - (reference number LWB/5900) - . . . ” show the Savings and Credit Society - where I was planting cotton, maize, The letter, signed in front of LC 1 Yet Josephatia Mboneraho, the Chair as holding a 44 year lease—start cassava.” Chairman, Tegwas Kaahwa, is ad man of Hoima District Land Board, ing in September 1991 but granted dressedConcluding to “Mr. puzzles Asiimwe Habert.” He adds that his new landlords are also contacted by telephone, said retrospectively in 2007—which was constantly bullying him. “The new that a sale had indeed taken place, transferred to Ms. Mirembe on April owners are now planting pine in our and that Major Muramagi was issued 20, 2011. These were accompanied- It is impossible from our limited gardens, which we must look after with a title. Oil by an A3 size colour photocopy of a research to reach any conclusion alongside our crops. If they find a in Uganda - In a follow-up visit to Kigorobya, boundary map of the land in ques on the rival claims of Deo Birinaiwe tree under your care has dried up, spoke to a Catholic parish tion, drawn up by the Commissioner and Erineo Rugondo over the origi they arrest you or threaten you.” - - priest, Father James Aliomu Sabiiti, of Lands and Surveys nal ownership of the contested land - He and other villages also report that who reported that Major Mura Also enclosed were copies of com lease. police in blue camouflage uniforms magi had personally approached the - pensation agreements, dated be It is also hard to unravel claims and are now regularly deployed to guard church for help in resolving a dispute tween August and October 2011, counter-claims about violence, ar theA disputed area. history between himself and local people between Christine Mirembe and rests and detentions that have taken - over the contested land. six occupants of the land she had place since the April 2011 sale. - acquired. These appear to show that In a telephone interview, Deo Birinai “He is the one who requested that the parish priests handle the matter in a the ‘squatters’ agreed to accept sums It seems certain, however, that this- we, the Secretary Manager of a Bu ranging from 5 million to 7 million sale and later efforts to ‘vacate’ the nyoro Teachers Cooperative Savings bid to solve the issues amicably,” Fr. We capture the whole conversation.Sabiiti said. “He came here and asked shillings (US$ 2,000—2,800) each in land of its occupants sparked resis 4 OILIN UGANDA www.oilinuganda.org

tance in the community, arrests and Portraits from refinery site detentions. - - - It is also notable that, before the sale, this 1,205 hectare plot of land was Early this year, the government an Production Department, the consul ferent parts of Uganda and neigh being leased for a total rent of just nounced that a site had been chosen, tants have involved local people by bouring countries. Land allocationsOil 120,000 shillings per year—a mere in Kabaale Parish of Hoima District’s forming Resettlement Action Plan inhave Uganda mainly been informal and go 100 shillings (US$ 04 cents) per Buseruka sub-county, for a 29 square committees. unrecorded. On a recent visit, hectare. Why would anyone, whether kilometre oil refinery complex. - - heard from long-term an ISO man or a “Kampala lady,” “Apart from village chairpersons, residents that in-migration has spend many hundreds of millions of A Kampala-based consulting compa the other 16 members on the com - increased significantly since the - shillings buying a lease that now has ny, Strategic Friends International, mittees were elected,” Hangi says. discovery of oil—and even more so only 23 years to run? (Bearing in was contracted to develop a com The committees are intended to since the refinery project was an - mind that the costs included not just pensation and resettlement plan for establish the real owners of the land nounced, as incomers arrive hoping thee purchase price—whether 300- an estimated 20,000 people who and determine whether they prefer for some crumbs from the compen or 500 million—but, according to will need to be relocated from 16 compensation in the form of money sation cake.The five pen-portraits - th Mulindambura dossier, signifi affected villages. or in the form land elsewhere. presented here illustrate the varied - cant compensation for ‘squatters’ origins and backgrounds of people According to Bashir Hangi, a com Still, it’s not going to be an easy- and also the services of Kageera & - living in the parish. Katumire, Uganda’s “oldest law firm,” munications officer for the govern job. Over many years, people have according to its website, and doubt ment’s Petroleum Exploration and migrated into the area from dif Report and pictures by F. Womakuyu less one of the most costly.)

What expected, eventual profit could Esther Igonja has spent The couple first stayed - grass-thatched housing or justify such expenditure? 50 of her 80 years in in Arua but moved to earned more than a dollar Kabaale. Kabaale in 1965. Togeth a day. Her seven children Another important question: What whoer, they have farmed now borne 20 acres, were all born at home, is the connection between Christine She came to Uganda with- producing seven children- and five others did not Mirembe and Major Muramagi? Who her husband, Moses Kasa- survive. is the principal and who is the agent? Vubu, from Kasai Prov more than 25 grandchil ince in Congo in 1961, “Now we are going to be Who is acting for whom? dren, all living on the after Patrice Lumumba same land. - thrown off our land and Despite his denials of ownership, was assassinated. “We we don’t know where we are of the same origin as It has not been easy. Igon are going,” she laments. numerous testimonies point to the Lumumba and were being ja never attended a day’s “Our family cannot go Major’s involvement in the purchase witch-hunted,” Igonja schooling, and her family back to Congo, Uganda is and development of the land. Deo recalls. has never risen above now our home.” Birinaiwe, in a third version of his story, related over the phone when contacted for further clarification,- Zebulon Kaawa, 35, from a Munyoro man and The business prospered claimed that the Major had initially describes himself as “the we have known no other and Kaawa, who has agreed to buy the land for 300 mil richest man in Kaiso place,” Kaawa says. two wives and fifteen village” which lies at the children, now oversees lion shillings and made a down- heart of the proposed Kaawa attended the a thriving beer and soda payment of 45 million, but “After a refinery complex. village primary school wholesale outlet, netting week, he came back and said he had- but did not progress to - two million shillings a changed his mind, so we refunded - His father, a trader from secondary. Instead, he month. He also owns and his money.” It was only then, Biri Mpigi, moved into the started fishing and even rents out a local minibus naiwe added, that Ms. Mirembe ap area in the 1970s. “He tually saved enough to taxi. bought five acres of land open a small shop. peared with her offer.

Yet even after the sale, the Major - has apparently been prominent in Winnie Ayabare, 41, was - of land in Kabaale for News of the refinery developing the land and, as the letter- born in a Bahima pasto cattle raising. Last year, project has since put- pleading clemency for a jailed man ralist community in Ntun she bought two of those those plans on hold. She seems to show, in the disputes sur gamo District, but her acres from her brother, is, meanwhile rent family moved to Luwero and began to build a small ing a back room in the rounding it. Community members, Oil in after the 1986 war that house. She planned to Kyapaloni market, where Ugandaincluding Father Sabiiti appeared - brought Yoweri Museveni move there with her six she is already operating a genuinely baffled when told by to power. children and to open a small restaurant. that the Major denied own restaurant in Kyapoloni ership. “Then why doesn’t he leave In 2005, she says, her trading centre. us alone?” one young man asked. brother acquired 25 acres

The Major’s strenuous efforts to prove he did not buy the land are - Lawrence Ozelle, 20,- thatched huts and around make a reasonable living. also puzzling. The rapid mobilisation was born in Kyapaloni to four acres of crop land. Now he is worried by the - of the meticulously presented Mu parents who had mi changes that lie ahead. grated from the West Nile Ozelle completed only - lindambura dossier was apparently region in the 1980s. They the first year of primary “Our future lies in bal intended to distance the Major from were seeking refuge from education, but is supple ance,” he says. “It has the case. In fact, it tends to achieve revenge attacks after the menting his income from disorganized us and we precisely the opposite. overthrow of Idi Amin. farming by mending cannot plan for our lives.” - bicycles. This is the only Finally, the single most disturbing Ozelle’s father died skill he knows, he says, aspect of this case is the possibil in2009, leaving two grass- but he was managing to ity that Major Muramagi may have used the armed force of the state to pursue private business interests, - Cattle herding brothers Kabaale Parish, which had the other without any whether for his own sake or on Stephen Rucogoza and plentiful grazing. interference,” Rugambwa, behalf of others. Various interview Samson Rugambwa fled 53, recalls. Rwanda during the 1994 “It was a game reserve, ees insist that this has happened. genocide. - with vast land and few The brothers have 20 And even Deo Birinaiwe, in our last people lived here. We children between them, interview with him, hintedOil in Uganda that it They first reached Lu built a few huts and all raised in Uganda, but might. “Muramagi is a big man in this wero, in central Uganda, grazed in the reserve, none has studied beyond country,” he warned , but soon after moved to moving from one end to primary school. “And if you want to take him on, you A more detailed version of this story ap- pearsmay suffer.” on our website, www.oilinuganda.org We capture the whole conversation. 5 www.oilinuganda.org OILIN UGANDA Land, oil and dispossession

By an unfortunate twist of fate, in bringing Bunyoro and other areas Uganda’s oil and many other mineral under British rule), this created a resources lie beneath some of the lasting sense of historical grievance. poorest and most marginalised areas The discovery of oil in Bunyoro could of the country. According to the 1995 not help but bring those grievances Constitution, the state holds these - to the fore. resources in trust for the people; but the great risk is that they will be cap Yet the Banyoro were not alone in being dispossessed. As the sun set atured whole. by predatory elites, rather than used for the benefit of the people as on the British empire, many people were displaced and resettled in the THIS LAND IS NOT FOR SALE process of creating national parks.- In The early colonial era achieved the some cases entire ethnic groups were contradictory results of stitching - relocated, with generally dire con together disparate kingdoms and sequences for them. This happened, communities into a single ‘protector for example, to the Ik people, who

ate’ yet at the same time embedding were removed from their ancestral Nina Narvsten Graphic: regional and class divisions within it. hunting grounds to make way for the Kidepo National Park, and went into Buganda, along with parts of Toro terminal decline. and Nkore, was developed as a cash crop economy, supplying cotton to Karamoja, already being prospected the British textile industry. In these for gold and other minerals, may well areas, after themailo Crown had claimed now become a new frontier in oil ‘vacant’ land, the rest was shared exploration, given recent discoveries recognise the family’s claims. Many Moreover, although land registries as freehold ( ) land between across the border in Turkana, Kenya. - families, in any case, cannot see point are, in theory, public documents, in 1,000 chiefs and clan leaders, whose - of obtaining a piece of paper to for practice they are jealously guarded clansmen henceforth worked the Much of Karamoja’s surface land - malise their tenure. by Land Boards, adding to the suspi land as tenants. This was a radical technically belongs to the state. This will likely be news, and highly unwel few.cion that local officials are complicit transformation of previous social and - Yet this leaves them vulnerable to come news, to the great majority of in the accumulation of land by a lucky economic relations. outside entrepreneurs, developers Karamajong people, who saw negligi “Speculator’s honeymoon” and“Speculation speculators. is legal” In the rest of the country cash ble development in the 20th century- cropping was introduced later and and who now risk being classified as Stephen Mukitale, the NRM Member less extensively, and nearly all land - ‘squatters’—like the Baganda ten Land speculation is certainly rife in remained under customary tenure, ant farmers before them—on their of Parliament for Buliisa County, oil-rich areas but it is not illegal, a Buliisa, has long been waging war on used for mainly subsistence agricul- ancestralLand markets lands. Oilsenior in Uganda central government official, land speculation in Bunyoro. ture or pastoralism. Well over half of who preferred not to be named, told Uganda’s land remains under cus recently. - For several years, he claims, around Secure property rights are often Dispossessiontomary tenure to this day. 30 families “from Kampala” have said to form the bedrock of market Local entrepreneurs, he acknowl been using local agents—including economies—the foundation on which - edged, have been buying up plots Franco Kahwa, named in our article Along the Albertine rift, large tracts the rule of law is built, giving rise to from individual farmers, perhaps on page 3—to buy up land along the of land were gazetted as forest or general development and prosper on behalf of wealthy families from whole Albertine Graben. game conservation areas. ity. This was a central argument of elsewhere and with the assistance - John Locke, the British philosopher of District Land Boards, which have He also alleges that he has been In much of Bunyoro, people were left whose thought greatly influenced the jurisdiction over land titles and are harassed and intimidated by local se to meet their needs from a relatively founding fathers of the United States independent of central government curity chiefs and police because of his narrow corridor between gazetted of America. It remains an article of control. efforts to expose this. On December land to the east and Lake Albert to faith in the thinking of mainstream 2, 2010, he complained in parliament the west. Combined with the fact that development economists. The apparent aim is to aggregate that: the kingdom was forced to cede land smallholdings into substantial to Buganda as a penalty for resisting Yet across much of Uganda—and parcels that can be sold on at much “Every time I appear, he [Officer colonial occupation (and as a reward many other places too—people do higher prices to private developers as in Charge of Buliisa police, Edison to Buganda’s leaders for their help not see land as a mere commodity, an expected oil boom gathers pace. Muhangi] comes with an AK 47 and people do not property to be bought and sold, but Compensation settlements for land some people . . . They have shot at as more deeply connected with their that is compulsorily purchased for - me three times . . . I request that this see land as a way of life, traditions and culture. oil infrastructure or related public matter is urgently handled if we really- For this they are often chastised as works are another source of poten want to prevent a Niger Delta and an mere commodity, having ‘backward’ ideas. tial profit. - Ogoni [situation]in the Rift Valley, be cause I can see the speculators, the oil Uganda’s 1995 Constitution and - - Yet this does not break any law, ac sharks, moving so fast to even recruit property to be 1998 Land Act confirmed the four mailo cording to the official. A buyer may in the security, even to recruit politi kinds of tenure instituted under Brit reach a private agreement with a cal leaders, even to recruit those who bought and sold, ish rule— , freehold, leasehold customary landholder, have the land- should be protecting the community.” and customary—but government surveyed and receive a freehold title - - but as more deeply policy has been to encourage a shift provided that the community con The MP claims that his investigations- from customary to freehold. A family firms that the seller did have custom prompted President Museveni to an connected with that has inherited customary rights ary rights over the land. nounce a ban on further land transac may apply to the local Land Board to tions in Bunyoro, in a bid to calm the their way of life, have a freehold title issued. The official acknowledged, however, situation. that District Land Board staff “may - traditions and This, however, has proceeded only not be doing their jobs properly” in Yet Hon. Mukitale believes this has very slowly. The process involves visiting the community to verify that- now turned into a “speculators’ hon culture. significant costs, as the land must the seller has rights and that those eymoon” because it has prevented first be surveyed and demarcated, rights are recognised by his neigh locals with customary tenure rights and other community members must bours. from obtaining freehold titles. 6 We capture the whole conversation. OILIN UGANDA www.oilinuganda.org

And after oil? -

vate companies and asset managers, In short, oil wealth could be a sig - compared to some 34 million now. If the past and the present are both from neighbouring Qatar all the way nificant factor in leading the country And by then there will be no more oil.- marked by dispossession of the many to South Korea. Around 53 million towards the kind of plantation ag - All of which is good reason for poli for the benefit of the few, the danger hectares – roughly the size of France riculture that, by a quirk of colonial cymakers to use oil wealth to sup is that the future also will be. – has been sold, leased or licensed history, Uganda largely avoided in the globally since 2001, and that only 20th century. port, and not to dispossess, the small When the oil is gone—in around covers deals with reliable sources. scale farmers. 30 years from now—the soil will The true figure could be over 200 Yet if that happens, what will become- When the oil is remain. Uganda’s land, much of it million hectares. - of the many millions of Ugandan prodigiously fertile, is the country’s families who still live from subsis - gone—in around most enduring natural resource. Its In Uganda’s case, the land rush—in- tence farming and cash-cropping, fertility may be threatened by local volving local elites at least as much as and to the smaller but still substan 30 years from and global climate change, but it is international investors—maysee page 11 in fu tial number of pastoralist families? likely to remain a critical resource for ture be spurred by what economists The oil industry will certainly not now—the soil will many generations to come. call ‘Dutch disease’ ( ). At its simplest, the ‘disease’ will, as a absorb them. A few thousand skilled remain. Uganda’s But when the oil is gone, who will result of oil revenues and increased workers—welders, fitters, etc—will own Uganda’s soils? government expenditure, raise the be needed over the next few years to land, much of value of the Ugandan shilling. That build the infrastructure required to - The local oil rush is coinciding with a - will make agricultural exports, the extract the oil. But once it is flowing global land rush. Higher commodity it prodigiously current mainstay of Uganda’s econo regularly the operation will be over prices—driven by the growth in the- my, less competitive. seen by just a few hundred highly number of people, especially in Asia, trained technicians and managers. fertile, is the able to afford significant consump It is highly likely that policymakers tion—are driving large scale landThis will cite Dutch disease as another With Uganda’s population currently country’s most isacquisition Africa by commercial investors. reason to encourage large scale, growing by 3.3 percent each year, the According to a recent report in commercial agriculture. Big farms, it livelihood challenge won’t get any enduring natural - : will be said, can achieve economies easier. According to the World Bank,- of scale, mechanisation, and higher even if family sizes decline steadily resource. Africa’s land is attracting unprec - productivity, and so could sustain in response to improved life expec edented commercial interest from the competitiveness of agricultural tancy, “in 2050, Uganda’s population governments, sovereign funds, pri exports even during an oil boom. is likely to exceed 80 million people,” Drilling down to the deeper issues

Surface issues: -

As oil production gets under way, are there workable procedures in place to assess and pay fair compen sation to people whose land is compulsorily purchased, occupied, or otherwise affected by the extensive infrastructure that will be needed for production, storage, transport and waste dispoal, and for associated public works?

Just below the surface: - - There is now ample evidence that substantial areas of land in the Albertine Rift have been ac - quired—‘grabbed’ is the usual, Ugandan way of putting this—by local and national elites. The presumed motive is invest ment in land whose value, as the region becomes an oil-boom area, is soaring. Profit may come either from later compen sation deals, or by re-sale for private developments.

Because land in the region is, overwhelmingly, held on a customary tenure basis, most communities believe that they have secure and hereditary rights over it—and are dismayed to find that it is being sold from under their feet in deals of, at best, dubious legality.

Yet when these deals lead to conflicts, local authorities and police appear generally to side with the buyers.

Gender dimension:

It is invariably men who decide to sell land—whether it is theirs to sell or not— and who decide how to use the proceeds. If these are spent in a consumption splurge, women are often left struggling to feed the family.

Cultural identity and conflict: - Land for many people, especially under customary systems, is intimately entwined not only with livelihood but also with issues of cultural heritage and identity. Purchases by outsiders, even with due legal pro cess, can be experienced as cultural encroachment and invasion.

In Bunyoro, these issues are amplified by a widely held sense of historical grievance over lands forfeited in the colonial era, and subsequent economic marginalisation.

Yet this is further complicated by the fact that Bunyoro is not, in fact, communally homogenous. Tensions over land have already sparked inter-community conflicts.

An uncertain future:

Most economists agree that, even with good management, oil revenues will tend to strengthen - Uganda’s currency, raise the price of services such as construction, and make agricultural exports less competitive. One effect of this ‘Dutch disease’ may well be to increase policy pressure for concentrating land holdings in larger-scale, com- mercial farms—whose economies of scale, it will be argued, make them better able to compete on world markets. But

Graphic: Nina Narvsten Graphic: what will happen when the oil runs out? If Uganda is not able to absorb former subsistence farmers into other occupa tions, the country may be left with a large, impoverished and landless underclass.

We capture the whole conversation. 7 www.oilinuganda.org OILIN UGANDA Heritage Oil malpractice reveals waste management flaws | By Chris Musiime and Nick Young The dumping of oil waste on a farmer’s land raises serious questions about Uganda’s capacity to manage wastes when production starts in earnest

- - - NWOYA DISTRICT. A farmer who cessing the place and said nobody Emmanuel Omara, the District Envi- “Now,” says Omara, “It is the respon says that Heritage Oil dumped should go there.” ronmental Officer of Nwoya Dis sibility of this office to work with - dozens of truckloads of waste in a trict—which was carved out of Am Total to make sure that they ferry all Oluoch described the waste as a kind pit dug on his land, a few kilometres - uru Districtby in NEMAJuly, 2010—was more these wastes to the temporary facil of greenish clay, oozing liquid. It is north of Murchison Falls National - forthcoming. “It is true that a sample ity in Tangi.” - Park, is still waiting for the National not possible to confirm what it actu was taken [ ] but the results Environmental Management Author ally comprised and whether it was have not been received formally Frederick Okecha, who serves as Lo first treated. However, along with cal Council V Chairman for Purongo ity (NEMA) to give him the results -of - here,” he said. When Heritage sold its tests they conducted in 2009, and for spoil from test wells—some of which interests in the exploration areas to sub-county, strongly agrees. “We held the waste to be removed for perma are sunk more than a kilometre be Tullow Oil, he added, Tullow “took a dialogue with Total and this was nent disposal elsewhere. low the surface—exploration waste over all the liabilities of Heritage.” the first issue we put on the table,” can include the remains of chemical he says. “We feel that as part of their Douglas Oluoch, 43, relates that he lubricants and coolants used in the “The District had a meeting with corporate social responsibility, even first came into contact with Heritage drilling process. them. At that time, Tullow were still if it’s not mandatory, they should in his capacity as a local councillor holding all the wastes in the drilling - help us and remove this waste to give Although claiming that “Albert” told (LC II) in Purongo sub-county of sites. But then theywithin had a Purongo plan of a good signal; and they promised to him it would be safe, within a few what is now Nwoya District. In 2008, constructing a temporary waste facil- do it.” he says, a Heritage official, who he months, to plant crops on top of the ity at Tangi Camp [ ]. pit, Oluoch became concerned when Total appears ready to listen. In a can identify only as “Albert,” offered When they did that, they were sup- to pay him for accepting waste from NEMA officials visited the farm where posed to carry all these other wastes, written response to a request for exploration wells dug within the he lives with three wives and ten and store them there while govern information, Anne-Sophie Leroy, National Park.Oil in Uganda children. They advised the family, he ment looks for a way of disposal.” Environment and Corporate Social says, not to eat the cassava they had - Responsibility Manager for Total Oluoch told that he planted on the site of the pit. He adds Omara, who has also been serving in Uganda, stated that “As the new received 750,000 shillings (USD 300) that NEMA officials have since visited- as the Forestry Officer of the Dis operator of Exploration Area 1, Total for accepting the waste, adding that the site several times, and in 2009 trict, says that he was so busy with will deal with legacy issues inherited “They said it was not harmful and dug a deep hole to carry away sam other matters that he was only able from the previous operators of the would act as a fertiliser.” ples of the waste for analysis, but that to maintain sporadic contact with licence area.” he has not yet been told the results. Tullow over the case. The company, he went on, sent an - However, she added, “The current excavator to dig a 25 metre by 25 Oluoch also says that he has since - He confirms, however, that when limitation for us is that there are no metre pit, 10 metres deep, on part been “stigmatised” by his neigh Tullow was removing drilling waste guidelines yet from the regulatory of his 8-acre plot, which is adjacent bours, who were alarmed by the of from sites within the national park to agency NEMA on the proper handling to a murram road leading from the ficial visits to the site. They fear that the storage facility in Tangi, “We were and disposal of drilling waste and Karuma-Pakwach highway to the it might contaminate ground water in informed. I inspected and ensured there are space constraints at the north gate of the National Park. For theConfirmation area. that all the waste was ferried from licensed waste storage areas. When a week, two trucks ferried waste to - there.” - these guidelines are put in place, the site, each truck bringing three or - drilling waste will be accordingly four loads a day. Finally, the pit was Officials in the National Environmen Since February, when Tullow part- removed, treated and disposed of in tal Management Agency’s Director nered with CNOOC and Total to work- This story was published on our website in covered with topsoil. May.the appropriate On June 26, NEMA manner.” published an eight ate of Monitoring and Compliance jointly on exploration and produc page set of Operational Waste Management As far as Oluoch knows, the pit was Oilconfirmed in Uganda. that they knew of the case tion, Total has become the main op Guidelines for Oil and Gas Operations. not lined with concrete or plastic. - but were unwilling to discuss it with erator of Exploration Area 1, which

Photo: Nick Young While the operation was in progress, includes parts of the new Nwoya Photo: Nick Young he says, “They stopped me from ac District.

Douglas Oluoch points to where Heritage buried oil drilling wastes on his farm Oluoch shows a lump of clay, from the waste pit.

8 We capture the whole conversation. OILIN UGANDA www.oilinuganda.org

Photo: Nick Young Amuru District Town Council: Here, people have returned from IDP camps to till the land again, but keep hearing rumours about oil. Rumours are filling the information gap: the areas has received none of the ‘sensitisation’ efforts that NGOs and companies have undertaken in Bunyoro.

Commentary: Bad precedent and bad omen

- - In the absence of adequate regulations at the International oil companies have now been promised an interview none was forthcom time, it is not clear whether Heritage’s disposal- exploring the Albertine Rift continuously for ing. No doubt NEMA staff had many other mat of drilling waste on Douglas Oluoch’s land was more than a decade. Yet only in May, 2012, ters to attend to. Yet they need to understand technically illegal. But it certainly fell spectacu did the National Environmental Management - that the failure to respond to legitimate public - larly short of the “international best practice” Authority and other major government players and media enquiries can only increase public which the Petroleum Bills currently before come up, at last, with an Environmental Moni mistrust and cynicism surrounding oil explora Uganda’s parliament affirm as the standard for toring Plan for the area. tion and production. Oil the country’s nascent oil industry. in Uganda How much confidence can Ugandans have in Travelling in Amuru and Nwoya districts, Even if the wastes were relatively innocuous, the authorities’ ability to implement the plan found clear of evidence of mistrust, disposing of them for a pittance in a private when we learn, from this case, that NEMA cynicism and mis-information. One person deal with a semi-educated farmer was, at very has failed to report to a local government the interviewed, for example, appeared to believe best, shady and cheapskate. And the apparent results of analysis of a potentially polluted soil that Mwangi camp is the site of an existing concern subsequently shown by thenot National - sample a whole three years after the sample oil refinery. This persistent rumour arises Environment Management Authority suggests was taken? - from ignorance of the oil industry: why would that the wastes were quite possibly innocu companies that spend hundreds of millions of ous. If the existing monitoring capacity was in dollars in exploration and production, in the adequate to cope with the early exploration hope of spectacular profits, waste their time The UK-based Heritage walked away from phase, how will it cope with a greater workload trying to earn a few shillings from a kitchen- Uganda in 2009 with hundreds of millions of as production comes on-stream, and as more sink refinery producing a few truckloads of dollars in profits from its exploration foray, companies move into exploration through petrol? Yet suspicion of skulduggery—already - after selling its interests to Tullow Oil for US$ future licensing rounds? stoked in Purongo sub-county by the sloppy, 1.45 billion—and then contested and refused waste-management antics of Heritage—will At minimum, improved institutional capac - to pay the US$ 404 million capital gains tax persist as long as communities who are already ity is essential, both for NEMA, and for the oil- levied upon the transaction by the Uganda struggling with chronic poverty are kept in the irresponsi- forwardexploration when and Oil production in Uganda districts. Emman Revenue Authority. dark about oil exploration and development bility. uel Omara was admirably open and straight activities from which they have so far received This is a paradigm case of corporate called, without - At the macro level of trying to maximise a prior appointment, at his office in Nwoya no benefit whatsoever. Oil in Uganda its already substantial profits to the detriment District. But how can one man, however dedi Frederick Okecha, the Purongo LC V chairman of the Ugandan treasury, and at the micro level cated, be seriously expected to discharge the who accompanied to Douglas of cheating Oluoch, Heritage has displayed duties of a District Environmental Officer, in an Oluoch’s home, notes that Nwoya has received what a former British prime minister, with - oil-producing region, in just 50 per cent of his far less attention than Hoima and Buliisa reference to the behaviour in Africa of another workingPoor communication time? districts in terms of the kind of community British company, famously termed “the unac ‘sensitisation’ efforts pioneered in Bunyoro by ceptable face of capitalism.” - NGOs such as International Alert and ACODE. Finally, communication needs to be seen as - And he issues this dire warning: “Partners This was a bad start for Uganda’s oil industry. integral to capacity building. A major improve should come in and make sure that we have a The international oil companies that remain ment is needed both in communication be meaningful dialogue with the oil companies. here, and those that will come in the future, tween statutory bodies, and in communication will have to work hard to shake off the aura - Otherwise it feels like a war is looming.” between official bodies and the general public. - of avarice and duplicity that Heritage has left Government, oil companies and NGOs need to Our efforts to research and confirm the accu Questionablebehind as its major capacity legacy to Uganda. Oil in Uganda - respond to that call. And the primary responsi racy of this report are a case in point. Over the bility falls to government, which holds Uganda’s space of a week, made numer mineral wealth ‘in trust’ for the nation. At the same time, the Ugandan authorities’ ous phone calls to NEMA, and twice visited the handling of this case suggests a worrying lack offices of the Directorate of Monitoring and of monitoring and follow-up capacity. Compliance—but despite being repeatedly We capture the whole conversation. 9 www.oilinuganda.org OILIN UGANDA Cultural leaders demand a share | By Halima Abdallah The Bunyoro Kingdom’s claim for a share of oil revenues may have a ripple affect among cultural leaders in other oil and mineral rich areas.

- - - Growing demands from cultural lead- “All the kings and cultural leaders The central government has no in discovered oil almost around the ers for a share of oil revenues could must be given a percentage so that tention of handing over such sums to same time as Uganda, is also grap spark ethnic conflicts among margin they can continue doing something royal housheholds, but it is planning pling with how to share revenues alized communities in mineral rich good for the people.” to give a percentage of royalties to with the communities in the western- areas of Uganda, analysts say. district governments, and a portion region where oil is found. The region - Cultural leaders also contend that of that may be passed on to cultural had asked for 10 percent but the is “If communities begin demanding - their people will be the first victims institutions. sue remains unresolved. higher percentages, it will set prec of environmental degradation or edents. Mineral sites may bring con accidents arising from oil activities, A draft Public Finance Bill states that Traditional institutions in Ghana are- flicts as they start fighting for their as well a losing their culture as their “A district may, in consultation with represented on a statutory public shares of royalties. Far from bringing areas become multi-ethnic. the ministries responsible for culture interests and accountability commit wealth and health, we may not get and local governments, grant a share tee by a queen mother. political hygiene but ethnic politics,” “My people told me that, to get the of the royalties due to the district, to according to Makerere University oil out, you need a lot of water,” said a cultural or traditional institution.” In Uganda, The 1995 Constitution - History and Development Studies the Omukama. “Now, will this fresh states that “A traditional leader or don, Ndebesa Mwebestya. water be enough to get that oil out? Even then, payments to cultural cultural leader shall not have or exer And what will happen if there is an institutions could raise issues of cise any administrative, legislative or Ethnic groups in areas with minerals- accident and there is an oil spill into accountability. Kings customarily executive powers of Government or Additional reporting by Frederick Womakuyu other than oil and gas may present the water? Will the fish survive, or receive gifts from their subjects and local government.” similar demands, he suggests. For ex drinkingRipple effectwater survive?” how they use those gifts is a private ample the Bakanzo people in Kasese, matter kept within the palaces. in the west of the country and the Japadhola groups in Tororo, in the There are signs that, even if the Ndebesa Mwebestya believes this - east, may demand shares in revenues central government is not impressed would complicate any mingling of accruing from mining limestone. - by the Omukama’s arguments, other cultural roles and development pro cultural leaders share the same grammes. September, 1955: The King Professor Augustus Nuwagaba, a pov concerns. erty eradication specialist who also “They can use cultural politics to of Bunyoro, Omukama Sir teaches at Makerere, emphasises that Rwoth Charles Umbidi, a cultural - demand an environmental tax and - Tito Gafabusa Winyi IV, and “People need to realize that these leader from Nebbi, is the latest to that should go to the kingdoms—but- Sir Andrew Cohen, Governor are national resources. They are not make demands for his subjects—in it should not be combined with royal of the Uganda Protectorate, individual resources or community cluding better schools, hospitals, job ties that are likely to go to individu signed a ‘Bunyoro resources, they belong to the whole opportunities and construction of als,” he said. - Agreement.’ cultural sites. nation.” In an exclusive interview with - Shem Byakagaba, Managing Consul He acknowledges, however, that local He sees cultural sites as necessary to tant at a legal and governance firm,- Oil in Uganda, the present communities in areas where resourc appease the gods. - Lantern Consult, suggested that any Omukama, Solomon Gafabusa es are extracted may face social and money “should be given condition - Iguru, and his principal “We do not want our gods to be an environmental challenges and that ally—in the sense that the Kingdom private secretary, Yoram Ns- noyed with noise during exploration, “government should consider this opens another entity that will imple amba, argued that this agree- so to appease them we must perform and give the districts a share of oil ment its policies and programmes ment remains legally valid: our rituals.” revenues.” and in turn the entity can be audited the Government of Uganda, they say, has inherited and Besides the Banyoro and the Alur since it will be accountable to the In Uganda minerals are often found in - should honour the commit- people of Nebbi, the Acholi in the Kings subjects and the king himself.” the most marginalized communities, ments made by Governor - north, Lugbara in West Nile and Ba Without such an arrangement, he but legal regimes offer them, at best, Cohen. toro in the west seem poised to voice said,Experience “skeptics elsewherewill have the day,” only surface land rights. Compensa - their demands. The list could grow tion for compulsorily purchased land The Omukama and his adviser longer as the areas with oil and gas is often very low, leaving many land In South Africa, cultural leaders do complain that they were never potential stretch over 500 kilometres Theless at Omukama’s the end of the case day. receive royalties accruing from gold. consulted over oil prospect- along the Albertine Rift valley. - ing. They are now claiming In other countries, however, revenue 12.5% of oil royalties for the Omukama Gafabusa Iguru has sharing continues to present chal Cultural institutions argue that, spearheaded the cultural leaders’ lenges. For example, Ghana, which as hosts of the resources, they are - demands. In an unusual appearance entitled to some revenues to steer before a parliamentary committee development in their already margin this May, he called for assurances on alized communities. They also expect environmental protection and a 12.5 job opportunities and improved percent share of oil and gas revenues. social services. According to one news report, the “My people are very poor, yet we Speaker of Parliament, Rebecca have lots ofOil resources,” in Uganda the Omukama Kagada, instructed parliamentary (King) of Bunyoro, Solomon Gafabusa committees not to receive further Iguru, told in a recent, delegationsAccountability from cultural leaders. exclusive interview.

“This region has a huge potential The 12.5 percent of oil revenues that for the development of agriculture, the Omukama is demanding would but the sector is not well developed amount to hundreds of millions of because we have no tractors or silos - - dollars a year at peak production. to practice commercial farming and The Banyoro see this as an opportu move away from primitive, subsis nity to right historical injustices that, tence farming. The roads, schools, since the colonial days, saw them water and energy are really not lose land and experience economic developed – so we need affirmative decline. action10 to develop,”We hecapture continued. the whole conversation. OILIN UGANDA www.oilinuganda.org What are the ‘natural resource curse’ and ‘Dutch disease’? Photo: Kjetil Alsvik/ConocoPhillips

- The phrase ‘natural resource curse’ At the same time, demand also tends is often used to describe a situa to rise for some service industries— tion where, rather than bringing such as the construction industry, widespread benefits, the extraction since resource booms often fuel a of a country’s mineral, oil or gas building boom. This tends to make resources causes significant harm. It those services more expensive, which is also sometimes called ‘the paradox can hurt poorer citizens. of plenty.’ The economy as a whole becomes The ‘curse’ is commonly said to over-reliant on the natural resources result• from: - that it is exporting—and this can be particularly damaging if, for any Political conflict over the re reason, there is a drop in world price sources—pitting regional, ethnic forSpanish those natural disease? resources. or religious communities against Norway’s Ekofisk oil field in the North Sea – Dutch curse, Norwegian blessing • each other Dutch disease is named after the High inequality in the sharing experience of the Netherlands in the of benefits—typically, when a Uganda. 1960s, when major gas finds brought narrow band of relatively well-off than is absolutely necessary before Fund will be a prudent option for a short-lived boom created problems people benefit, but the poor stay recovering that money and showing - in other areas of the economy. • poor or even get poorer - a profit. aged. - Concerns with how well it is man On a longer, historical view, the Environmental pollution—re However, the same effect can be economic illness should perhaps be sulting from lax environmental achieved, and the risk of harm to oth called ‘Spanish and 17disease.’ The government may also find it hard standards and/or low capacity er sectors of the economy reduced,- th th to persuade Ugandans of the wisdom for environmental monitoring by the government saving some of In the 16 centuries, gold of a save-for-later policy. • and enforcement of standards and silver flowing into Spain from the earnings from resource extrac - its South American colonies created tion, rather than going on a spending Understandably, some people will Corruption and ‘rent seeking’. - sumptuous lives for the Spanish splurge. ask “Why are you making overseas Everyone knows what corrup gentry and a Golden Age for Span investments while our children go tion is. ‘Rent seeking’ is a term Norway is repeatedly held up as the ish culture. But this influx of natural barefoot?” used by economists to describe shining exemplar of this strategy. - resource wealth also inhibited the the behaviour of people who try kind of agricultural and industrial Like the Netherlands, Norway discov to profit from gaining privileged development that was taking place ered oil and gas in the North Sea in Would you like the next access to a resource or market , in northern Europe. By the time the 1960s. But when income came two issues of Oil in Ugan- rather than by adding any value her colonies began to slip away to on-stream, the government created • to it - da delivered, free, to your independence, Spain found herself a Petroleum Fund, later renamed the post box? Weak government institutions a second rate power, and has ever Government Pension Fund of Nor that are unable or unwilling to since struggled to catch up with more way, into which it deposited up to 80 manage the resources effectively industrialised economies of Europe- percent of oil revenues. That money Thanks to funding support - - and America. The impacts of over- was in turn invested—for the most from the Ford Foundation and Most often, several or all of these dependence on natural resource ex part, cautiously—in international Democratic Governance Facil factors are thought to co-exist and in traction can therefore be seen to last stocks and bonds. ity, Oil in Uganda has been able - teract in resource-cursed countries. notSolutions? just for decades but for centuries. to circulate this edition widely. - Today, the Fund is worth more than Most discussion of the natural re US$ 600 billion, and still growing. To control costs, we need to source curse has centred on develop For the general problems of the This is a comfortable reserve to fall ensure that future issues go ing countries. African oil exporters resource curse commentators often back on in times of urgent need, only to people who really want such as Sudan, Angola, Chad and recommend an equally general list equivalent to around 120 percent to read it. Equatorial Guinea are very often said of ‘governance’ remedies: greater of the country’s GDP. It will likely Dutchto be suffering Disease from the curse. transparency; stronger and more ensure that future generations of If that includes you, we’d be accountable government institutions; Norwegians have some share of the happy to hear from you. curbing corruption; more equitable natural resource wealth that their Whilst ‘the natural resource curse’ is We are particularly interested - distribution and social investments; forefathers extracted. - now used to describe a wide range of in sharing our work with: making sure that there are tangible - issues, ‘Dutch disease’ is a more spe Over the last ten years the Govern - Government departments (at benefits for communities where the cific and technical, economic concept. ment of Uganda has received con both district and national level) resource is found; etc. These are - It refers to a situation where growth siderable technical assistance from - University, research centre doubtless worthy recommendations, in national income from natural Norway, and it apparently plans to and think tank libraries and but they rarely come with sugges resource extraction damages other put part of Ugandan oil revenues resource centres tions as to the specific processes and sectors of a country’s economy. - into a Petroleum Fund, although full - News Media and Freelance mechanisms by which they can be details have not yet been revealed. Journalists This happens because increased rev achieved. - Faith based and civil society enues from natural resource exports The differences between Norway and More specific remedies are, however, organisations tend to increase the real value of the Uganda should not be overlooked, often suggested for Dutch Disease. subscriptions@oil- exporting nation’s currency. That - however. Norway has less than five inuganda.orgAll you have to do is send an makes the country’s other exports, In theory, the risks could be avoided million citizens, a long history of email to such as agricultural products and by extracting natural resources rela stable, democratic institutions, and- , giving your full manufactured goods, more expensive tively slowly rather than in a short- when it struck oil in the 1960s it was contact details—including, of and therefore less competitive in - lived boom. But this is rarely possible by no means poor. Its remaining pe course, your P.O. Box number world markets. Imports meanwhile- because modern resource extraction- troleum reserves are also more than become cheaper, and this can under usually depends on large private four times the size of Uganda’s. OFFER LIMITED TO THE FIRST mine local producers and manufac companies that make huge invest Nevertheless, most development FIVE HUNDRED APPLICANTS turers. ments and will not wait for longer economists agree thatWe a Petroleum capture the whole conversation. 11 OILwww.oilinuganda.orgIN UGANDA www.oilinuganda.orgOILIN UGANDA Is the world running out of oil? (And will this mean that Uganda gets a good price for it?)

Oil wells were first sunk—from depleted, the world’s energy needs the mid-19th century, in countries can be met by an alternative source ranging from Poland to the United of petroleum—shale gas. States—mainly to obtain fuel, in the form of kerosene, for lighting. The This is a gaseous hydrocarbon invention of the internal combustion trapped in ‘shale’ rocks, the most engine to drive ‘horseless (motor) abundant form of sedimentary rock carriages’ gave huge impetus to the on earth. Over hundreds of millions of years, trapped oil and gas can oil industry. Ever more uses have Insider since been found for the ‘black gold’ slowly ‘migrate’ through cracks in - which today also fuels ships, trains, these rocks, to form the oil and gas airplanes and many power stations, reservoirs that exploration compa as well as providing raw materials nies try to find and tap. But a new for fertilisers, other chemicals and technology—‘hydraulic fracturing’, or plastics. - ‘fracking’ for short—can release and capture the trapped gas by drilling Photo: Robert Johnson, Business Not surprisingly, then, global petro into the shale and forcing in water, leum consumption has increased - mixed with chemicals, at very high steadily for 150 years. It now totals pressures. about 90 million barrels per day. Con - sumption seems set to keep rising as Shale gas is thought to be abundant and widely spread, with huge re demand grows from fast developing- countries in, especially, populous serves already identified in North Asia. Yet petroleum is a finite re and South America, Europe and source and cannot last forever. China. Optimists therefore say it will not only provide abundant energy for Some people believe that we have future generations—and a cleaner already passed the point—known form of energy than oil—but will as ‘peak oil’—where more than half also reduce geopolitical rivalries over of the world’s total oil deposits have energy resources. Some 20,000 shale been used up, and that it will get wells have already been drilled, the ever harder to extract the remainder. majority in the USA. This, they say, will have dramatic - consequences. Oil prices will climb Many environmentalists, however, ever higher and competition for the are deeply disturbed by this develop remaining resources will become ment, arguing that fracking brings- grave risks of catastrophic pollution fierce, possibly resulting in armed- - conflicts between oil-thirsty powers. to water tables and major gas leak Some predict this will start to hap ages into the atmosphere, aggravat In Alberta, Canada, up to two trillion barrels of oil lie mixed with sand pen soon—within the next ten years. ingClimate climate change change. beneath the topsoil of a 144,000 square kilometre area (more than half Others, pointing to existing East-West the area of Uganda). Vast machines now mine these ‘oil sands’ which, rivalry over energy resources, say it after costly processing, yield one barrel of oil per 2.5 tons of sand. Some The now undeniable evidence of is already beginning. see this as a triumph of modern technology. Others see it more as a sign - global climate change has added of desperation—and environmental vandalism—as easier-to-reach oil Many economists and oil industry impetus to the quest for cleaner and supplies are depleted. experts, however, dismiss these argu- renewable energy sources. Natural ments as scaremongering. They say - gas (including shale gas), a form of that new reserves are still being dis petroleum, burns more cleanly than covered and that improved technolo - oil, and many oil companies and gies are making it possible to extract governments see its increased use - oil from places that were once impos as a practical way of keeping down est’ options, have received the least Uganda’s oil, when it finally starts sible to reach. Higher oil prices, they emissions of greenhouse gases. investment in research and devel coming out of the ground, is likely to add, drive innovation in technology opment. Compared to the billions last for 20-30 years, and a lot could Relatively clean ‘biofuels’—notably and efficiency both in the extraction of dollars spent on fracking this happen within that time. ethanol, which can be produced from and in the use of petroleum products. remains true, but wind power is now - - maize or sugarcane crops—are also quite widely used in some European Further growth in demand from Asia- Optimists are inclined to see the making advances, especially in Brazil countries, and refinements to the and Africa, combined with major po- opening of new frontiers in oil ex and the United States. But these use technology may see its uptake grow litical upheavals or supply interrup ploration—East Africa; Canada’s oil large tracts of farmland that, many fast.Oil prices tions in the big oil producing coun sands; the Arctic Circle; ever deeper- people believe, should be devoted tries of the Middle East, Central Asia, sea drilling—as proof that they are to food crops to sustain the world’s and Venezuela could drive the world right: human ingenuity will prevail growing population. What does all this mean for the price price up. If you believe the ‘peak oil’ over scarcity and keep our petrol of Uganda’s oil? pessimists, upwards is the inevitable Other renewable energy sources tanks full. direction. - include water, wind, wave, and solar It depends who you listen to, and is ‘Peak oil’ pessimists are inclined to power. These can generate electricity- impossible to say with any degree of However, major new discoveries, - interpret the same evidence as prov that, in turn, could be used to power certainty. the rapid advance of shale gas, and ing that we are getting desperate -in battery-driven vehicles. Of these, hy - advances in renewable energy tech the quest for an energy source on dropower has been most extensively World oil prices have always been nologies could combine to drive the which we are dangerously depen exploited—but large hydro-dams highly volatile—rising and falling, of oil price gradually downward. dent.Shale gas have been widely criticised for their ten suddenly, in response to wars and - diplomatic crises, against an overall Ugandan policymakers therefore environmental and social impacts. More ‘Facts and FAQS (Frequently asked background of rising global demand needQuestions)’ to be about ready oil for can all be eventualities. found on our The technology optimists and major Environmentalists have long com - interrupted by occasional falls in website, www.oilinuganda.org energy companies also believe that, plained that solar, wind and wave demand during times of economic as12 conventionalWe oil resourcescapture arethe whole power,conversation. which they see as the ‘green turndown.